BUUMBA CHIMBULU writes
@SunZambian
THE private sector should meet tax obligations to assist Government recover the K3 billion it will forego due to the zero rating of the fuel importation, the Zambia Association of Manufacturers (ZAM) has advised.
Government this month included diesel and petrol on the zero-rating schedule of the Value Added Tax (VAT) Act which came effective on 1st January, 2021.
This move, however, means that Government will this year lose K3 billion revenue collection.
In response, ZAM vice president-South, Chipego Zulu-Chileshe, said in an interview that the loss of revenue called for strong adherence to tax obligations by the private sector to assist in recovering the K3 billion.
“In zero rating, Government is foregoing K3 billion revenue and that calls for us the private sector to ensure that we are performing.
“We need to ensure that we feed back into the tax system through tax compliance and basically delivering on our tax obligations so that the K3 billion can be recovered in the form of increased performance from the private sector,” she said.
Ms Zulu-Chileshe said zero rating of VAT on diesel and petro came as a surprise to the vast majority of the private sector.
She said the cost of energy had always been a major concern indicating that: “A measure to ensure that we maintain the current prices as opposed to an increment is a welcome move.”
Meanwhile, Ms Zulu-Chileshe commended the Zambia Revenue Authority (ZRA) for commitment to pay off VAT refunds.
ZRA Commissioner General on Wednesday announced that K12.9 billion tax refunds were last year paid out to key economic sectors. Out of this amount, K8.5 billion (67 percent) was paid to the mining sector.
“Going forward off course we recognise there are other measures that ZRA and Government have put in place to try and ensure that the private sector are stimulated for growth such as suspension of customs duty on manufacturing inputs.
“That is important because manufacturers can now apply to get customs duty reduced or removed in order to make locally produced products more affordable on the market. This is important to stimulate purchases of consumers and help to stabilise the economy,” Ms Zulu-Chileshe said.
